Ottawa-based video surveillance company Solink has raised US$60 million in a funding round led by Goldman Sachs, defying a fundraising market in which startups have struggled to attract large deals.

Solink plans to use the funding to expand its cloud services, which help customers like restaurant chains, retailers, financial services providers and hospitals review and analyze their video surveillance footage in real time and from anywhere. Its tech is meant to help employers identify crimes like theft as well as patterns like customer traffic. 

The growth stage round—which included funding from existing investors OMERS Ventures and BDC Capital’s IT Venture Fund—comes amid heightened investor interest in digital surveillance and forensics firms, even as venture and private equity deals have slowed for most other sectors. Solink is the second Canadian firm in the space to catch the eye of a U.S. financial behemoth this year, the first being Waterloo, Ont.-based Magnet Forensics, which agreed to go private in a US$1.8-billion takeover by U.S. private equity giant Thoma Bravo. 

Here’s what you need to know:

The deal: Solink CEO Michael Matta wasn’t looking to raise money when Goldman approached him with an offer from the banking giant’s new US$5.2-billion growth equity fund. Both Goldman and Solink took their time—about three or four months—to make sure the investment was right for all involved, said Matta. 

For Goldman, its investment came with a seat on Solink’s board. Some early investors, meanwhile, sold a portion of their Solink shares through secondary transactions as part of the deal. The terms of the deal constituted an up-round for all investors, Matta said. 

The CEO said the US$60-million gives the company enough money to expand into new markets and grow in existing ones, and the option to pursue “strategic opportunities,” which could include investing in AI-native products.

The growth: Matta said the market downturn has actually been good for his business. Since raising its last round—$23 million in 2020—Solink has grown the number of cameras in its network about 75 to 80 per cent a year. It now has customers across 18,000 sites globally, where it manages about 300,000 surveillance cameras, up from about 50,000 cameras in 2020. Part of the growth comes from business owners needing to protect themselves against mounting risks. “As the economy has slowed, risk has increased, [loss] has increased, crime has increased,” said Matta. “You’re finding a lot of business owners say ‘How do I protect profitability, and how do I find ways to ensure that we can maintain the confidence in the business?’”

The exit plan: Matta said this funding round could well be the company’s last, as the firm looks for ways to return capital to investors—whether through an initial public offering or a sale. “Inevitably, that’s what we need to focus on,” he said. “It’s not because it’s a flashy milestone that we want to hit, it’s just a function of raising capital from investors. We need to be able to provide liquidity for them.” 

Matta said the firm currently has no concrete plans for an IPO or sale. “We’ve got a lot of opportunity to keep scaling,” he said. “That’s really what we focus our time on, versus what does a go-public or an acquisition look like?”